Management review of 2012 while looking forward to 2013
Legal - If it has been more than three years since you reviewed your wills, please locate those documents and review them. Your review may not reveal changes to be made, but the review will keep fresh in your mind the provisions you have in your will. Now that we have some permanency in our estate tax law (or at least there isn't an expiration date), 2013 would be a good time to review for estate planning. Illinois land prices seems increased approximately 15% in 2012 making for an increased exposure to estate tax liabilities if one doesn't plan accordingly.
Accounting - Vow to not use the two-shoebox method! Many are now gathering information for the 2012 year only to discover they wish they had done a better job with their financial and production record keeping. The road to good financial recordkeeping is paved with good intentions; but good intentions help little in creation of financial documents that will help you manage your operation better. There are very good farm accounting software programs that are very easy to use that will allow you to reconcile your books to your bank statement so that there is no 'slippage' in either your income or your expenses. There are no substitutes for good accounting records; they are vital to marking your financial progress. An accrual income statement and a balance sheet are the first two documents needed in evaluating your financial progress and are good documents to place in the hands of your lenders. Strive to keep better financial and production records with the idea that you will use a period of five-years of these documents to create a better picture of your farms financial health.
Editor's note: The authors would like to acknowledge that information for this writing comes from the local Farm Business Farm Management (FBFM) Associations across the State of Illinois. Without their cooperation, information as comprehensive and accurate as this would not be available for educational purposes. FBFM, which consists of 5,700 plus farmers and 60 professional field staff, is a not-for-profit organization available to all farm operators in Illinois. FBFM staff provide counsel along with recordkeeping, farm financial management, business entity planning and income tax management. For more information, please contact the State FBFM Office located at the University of Illinois Department of Agricultural and Consumer Economics at 217.333.5511 or visit the FBFM website www.fbfm.org.